Vidant Fashion Sets Record Inventory Up 25% In One Month

Recently listed shares of Vedant Fashions, owner of ethnic wear brand Manyavar, hit a record high of 1,065 rupees, up 7 per cent in BSE in intra-trade on Monday. The stock surpassed its previous high of Rs 1,025 touched on March 31, 2022. The stock first appeared in the market on February 16, 2022.

Last month, Vedant Fashions outperformed the market with a 25 percent increase, compared to an 11 percent rise in S&P BSE Sensex. The stock recovered 34 per cent from a 52-week low of Rs 793 on February 24, 2022. The company raised Rs 3,150 crore via initial public offering (IPO) by issuing shares at Rs 866 per share.

Vedant Fashions is a market leader in Indian branded weddings and celebrations under the “Manyavar” brand. It has a differentiated business model that combines the strengths of retail and branded consumer play. With the company’s strong brand franchise, it is looking to tap into the large and growing Indian wedding and celebration wear market driven by increased spending, according to analysts.

The company is a one-stop-shop destination with a wide range of product offerings for every festive occasion. Apart from the main brand Manyavar (which caters to it at high quality mid-priced), it is consolidating its leadership in the luxury and value apparel segment of Indian men’s wedding wear through its other brands ‘Twamif’ and ‘Manthan’. It is also focusing on expanding its presence in women’s clothing through its Mohey brand.

The company generates healthy gross margins (about 72 percent plus) with no end-of-season rebates or MRP rebates. The Indian wedding and celebration market is relatively less price sensitive as compared to casual wear. The Indian wedding and celebration wear market has been pegged at around Rs 1,020 crore (15-20 per cent of brand penetration) while the branded space is expected to grow at a compound annual growth rate of 18-20 per cent by FY25.

For the nine months ended December 2021 (9 months FY22), Vedant Fashions recorded a 165% YoY growth in its consolidated net profit of Rs 226 crore, on the back of strong operating performance. The company’s revenue from operations nearly doubled to Rs.745 crore from Rs.373 crore in 9 months of FY21. However, Ebitda’s margin remained unchanged at 51 per cent during the period.

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